fxUSD Integration
This initiative aims to incentivize a BOLD/fxUSD liquidity pool on Curve
BOLD and fxUSD are the two decentralization-focused stablecoins in town, so it only makes sense to build liquidity together.
f(x) Protocol built a gauge mechanism, similar to Curve’s, that lets veFXN, vlCVX (Convex), and sdFXN (StakeDAO) holders direct future FXN emissions.
Voters can be incentivized to allocate future FXN rewards using products such as Votium, Paladin, or Vote Market.
The return on investment of voting incentives is very high: depending on rounds, $1 spent as voting incentive can bring $4 to $7 of FXN rewards to the LP.
Steps
- f(x) Protocol will create a BOLD/fxUSD pool on Curve and co-seed it with Liquity - $5.000 each. The seed liquidity will be withdrawn once the pool crosses $200.000 TVL or after 30 days.
- f(x) Protocol will create an FXN gauge for the Curve pool to direct $FXN emissions
- f(x) Protocol will deploy a Paladin adapter to receive PIL emissions and automatically incentivize the voter to distribute $FXN to the BOLD/fxUSD pool.
- f(x) Protocol will ask Convex Finance to support the pool so LPs can enjoy their yield boost without locking FXN.
Usage of the funds received
100% of the funds will be used as voting incentives for veFXN/vlCVX/sdFXN to direct FXN rewards to the BOLD/fxUSD Curve pool.
What is fxUSD
fxUSD is the decentralized stablecoin emitted by f(x) Protocol.
It is backed by WBTC, wstETH, and awstETH only.
fxUSD has a very strong peg design thanks to its deep USDC liquidity, peg keeping, and redemption mechanisms.
Learn more here.
Impact for BOLD
- Establishes a liquid and efficient BOLD/fxUSD pool for better swap execution
- Reduces slippage on large trades - an issue that limited LUSD adoption
- Supports deeper integration with DAOs/institutions, and aims to drive broader institutional adoption of Liquity V2 through improved liquidity infrastructure
- Offers a great yield strategy for liquidity providers seeking minimal centralized exposure
Threshold & Target
No minimum amount of BOLD is required for this proposal to be delivered.
f(x) Protocol has discussed a potential incentive program for BOLD. The community is receptive to the idea and is committed to demonstrating Curve’s effectiveness for stablecoins and incentive programs with its partners.
Impact Measurement, Tracking and Key Metrics
- Growing liquidity and volume
- Decreasing slippage on larger trades
Reporting
PIL efficacy will be covered extensively by f(x) Protocol community members and the f(x) Protocol X account
- TVL in BOLD-fxUSD pool
- BOLD-fxUSD liquidity distribution and volume
- Incentive amount and APR
- Capital efficiency
Practical Information
Receiving address: TBD once the Paladin adapter is deployed.
Nature: Paladin adapter to direct PIL to FXN vote incentives.